Hagerty, Inc.: Q4 FY2025 earnings call

What management said about Q4 FY2025, from the documents filed with the SEC on 26 February 2026: press release. Guidance figures: 3 kept. The quarter’s numbers.

Key takeaways

Top line and net income grew: Management reported 17% top-line growth and 91% net income growth for 2025. Source
2026 growth and margin expected: Management expects 2026 to bring another year of mid-teens written premium growth and underlying margin expansion, supported by technology and the State Farm rollout. Source
Markel economics renegotiated to 100%: Management said it renegotiated the Markel arrangement to capture 100% of premium through a new fronting arrangement. Source
Underwriting profits seen up 25%: Management said controlling premiums from its insurance operations will boost underwriting profits by 25%. Source
Combined ratio under 90% year-to-date: The Q3 letter reported a year-to-date combined ratio under 90%, consistent with the average over the last decade.
Goal of 3 million policies: Management set a goal of 3 million policies in force by 2030, double the prior level, and said 2025 is firmly on that trajectory. Source

“For us, 2025 was a year of investing for the future while delivering in the present.”
McKeel Hagerty CEO and Chairman

Guidance

Area	Period	Figure	Against last quarter
Combined ratio Source	ongoing, year after year	below 90%
Policies in force Source	by 2030	3 million	Kept
Markel fronting fee Source	from January 1, 2026	~2%	Kept
Underwriting profits Source	from 2026	25%	Kept

What changed from last quarter

New guidance: Management gave a 2026 expectation of mid-teens written premium growth and underlying margin expansion. Source
Guidance raised: The Q3 letter said full-year 2025 expectations were increased again, with no figure given in that letter.
New: The Markel arrangement was renegotiated to capture 100% of premium through a new fronting arrangement, after being announced as proposed in Q3. Source
New: A new partnership with Liberty Mutual and Safeco was announced in the fourth quarter. Source
New: The Enthusiast+ insurance product launched on the Duck Creek platform in Colorado. Source

Results and growth drivers

Top line and net income grew: Management reported 17% top-line growth and 91% net income growth for 2025. Source
371,000 new members added: The company added 371,000 new members in 2025, with new business growth described as record, toward its 3 million policy target. Source
Nine-month growth reported in Q3: Through the Q3 letter, year-to-date revenue had grown 18% and net income 73%, which management tied to resource prioritization.
2026 growth and margin expected: Management expects 2026 to bring another year of mid-teens written premium growth and underlying margin expansion, supported by technology and the State Farm rollout. Source
Secondary offering reintroduced company: In Q3 the company completed a secondary offering from the estate of the CEO's late sister, which management said reintroduced Hagerty to Wall Street.

Partnerships and distribution

State Farm rollout reached 27 states: Classic+ was rolled out to 27 states and policies were converted in seven of those states, with State Farm's contribution growing. Source
Roughly half a million to convert: Management said roughly half a million policies will convert to the new State Farm Classic+ program, fueled by Hagerty. Source
Liberty Mutual and Safeco partnership: A new partnership with Liberty Mutual and Safeco was announced, which management expects to become another growth driver. Source
Insurance distribution team expanded: Management said it invested in the Insurance Distribution team to pursue more partnerships and make more efficient use of the agent and broker network. Source
Partner pipeline described as robust: In Q3 management described the partnership pipeline as robust and growing as the team was built out.

“So what comes next? In a word: compounding.”
McKeel Hagerty CEO and Chairman

Markel fronting arrangement

Markel economics renegotiated to 100%: Management said it renegotiated the Markel arrangement to capture 100% of premium through a new fronting arrangement. Source
Underwriting profits seen up 25%: Management said controlling premiums from its insurance operations will boost underwriting profits by 25%. Source
Full economics and fee from 2026: From January 1, 2026 the company will assume 100% of underwriting and investment economics while paying a fronting fee of about 2%. Source
Accounting changes, growth path unchanged: Management said the new Markel arrangements change accounting but not the underlying profit growth trajectory. Source

Underwriting, catastrophes and products

Combined ratio under 90% year-to-date: The Q3 letter reported a year-to-date combined ratio under 90%, consistent with the average over the last decade.
Hurricane season passed relatively unscathed: Management said the company came through the hurricane season relatively unscathed, subject to any late surprises.
Guardian shelter program piloted: Guardian Safe Storage Concierge is a test program in Tampa and Miami that provides free shelter for member vehicles in parking garages.
Discipline targets combined ratio below 90%: Management said the strategy is underwriting discipline and a stable, predictable combined ratio below 90%, year after year. Source

“The Hagerty flywheel is spinning faster, and we are pulling together the ingredients necessary to create shareholder value over the coming years.”
McKeel Hagerty CEO and Chairman

Members and enthusiast reach

Retention at 89%: The Q3 letter reported industry-leading retention of 89%, reached as members stayed with the company year after year.
Net Promoter Score of 82: The Q3 letter cited a Net Promoter Score of 82 and a reputation as a leading Managing General Agent.
1.7 million members, 36 million target: Management put members at 1.7 million today and the target market at 36 million vehicles, up from 35 million in Q3. Source
Enthusiast+ launched in Colorado: The Enthusiast+ insurance product launched on the Duck Creek platform in Colorado, modeled on the Flex product. Source
Hagerty Drivers Club above 920,000: In Q3 the Hagerty Drivers Club had upward of 920,000 members, each paying $70 a year for club benefits.
Rising generations drive new business: Management expects more new business to come from younger enthusiasts it calls the rising generations, including Gen X and Millennials. Source

Marketplace and auctions

Broad Arrow transaction value up 119%: Broad Arrow Auctions reported more than $624 million in total transaction value across auctions, private sales and financing in 2025. Source
Three European auctions delivered: The European marketplace team delivered three auctions in Switzerland, Belgium and Italy in 2025, which management said established Broad Arrow as a leading player. Source
Private Sales brand reputation: Management said the Private Sales business has built a reputation as the trusted brand connecting top collectors with significant cars. Source

Strategy, technology and leadership

Goal of 3 million policies: Management set a goal of 3 million policies in force by 2030, double the prior level, and said 2025 is firmly on that trajectory. Source
Technology investments support members: Management said ongoing technology investments are intended to improve the member experience and streamline the cost structure. Source
Three-year growth since 2022: Management described the three years since 2022 as compounding growth, consistent margin expansion and very high rates of profit growth. Source
One Team credited for execution: Management credited the One Team Hagerty employees for their hard work and dedication to the company's mission. Source

Coming up, as management said on 26 February 2026

State Farm rollout continues into 2027: Management said the rollout will continue across most remaining states in 2026, with the balance following in 2027. Source
Liberty growth driver as 2027 nears: Management expects the Liberty Mutual and Safeco partnership to become a growth driver as the company moves into 2027. Source

Figures management reported

Figure	Reported
Combined ratio	under 90% year-to-date, consistent with average over the last decade
Catastrophe losses	relatively unscathed through hurricane season, barring late surprises

Risks management discussed

External: Management said the company came through the hurricane season relatively unscathed, but qualified this as barring any late surprises.

Earlier plans management reported on

On track: Management said 2025 puts the company firmly on the trajectory to double policies in force to 3 million. Source
Not stated: Management said financial results will reflect the previously announced Markel arrangement in how they appear. Source

Other quarters

Summarised with AI from the documents the company filed with the SEC. Every point is checked against the filing before it is shown: management’s own words word for word, figures against the line or table row they come from. A point that fails the check is left out. Source opens the filing at that line.

As filed with the SEC

Open the filing on EDGAR

STOCKHOLDER LETTER Q4 2025

People who drive 1960s and 1970s muscle cars know how great third gear feels. That’s where the car pulls strongly, with the power building and the road flowing toward you. That is exactly how Hagerty feels today: pulling hard in third and ready to upshift into fourth for a long, satisfying straightaway.

For us, 2025 was a year of investing for the future while delivering in the present. We grew the top line by 17% and achieved record profitability with net income growth of 91% - proof that the flywheel we’ve been building is now spinning faster and more efficiently as we look toward our 2030 ambitions. Our goal is bold but simple: double policies in force to 3 million, and 2025 puts us firmly on that trajectory.

Reaching that goal will take more than momentum, however. It will require clarity and discipline. Our strategy is grounded in a simple truth: growth only matters when it’s high quality, sustainable, and deeply member‐focused.

That means maintaining underwriting discipline and delivering a stable, predictable combined ratio below 90% year-after-year. We’re not chasing volume for volume’s sake. Instead, we’re building deliberately - risk by risk, member by member - so that every decision strengthens the company and positions us for the long haul.

Dear Hagerty Stockholders, Members and One Team Hagerty, STOCKHOLDER LETTER Shifting Into Fourth Gear ON THE COVER: 1969 Porsche 911E - Best enjoyed with salt air and curves. PHOTOGRAPHER: JAMES LIPMAN HAGERTY Q4 2025 |

HAGERTY Q4 2025 | 3 2025 highlights Looking back on 2025, a few highlights stand out as especially important “upshifts” in our journey:

We posted record new business growth and made meaningful progress toward our 3 million policy-in-force target by adding 371,000 new members. Even better, we expect that more and more of our new business going forward will come from what we call “the rising generations” of younger car enthusiasts. Gen X and Millennials covet the cool ‘80s and ‘90s enthusiast vehicles they were surrounded by in their teenage years just as much as the Boomers waxed nostalgic for muscle cars from the ‘60s and ‘70s. We will be there to help insure, buy/sell and enjoy their special car.
Our omni-channel strategy delivered strong results from both direct and partner channels, including a growing contribution from State Farm as the Classic + program was rolled out to 27 states and we converted policies in seven of those states.
We announced a new partnership with Liberty Mutual and Safeco, which we expect to become yet another growth driver as we move into 2027.
We invested in our Insurance Distribution team to position us for additional partnerships and more efficient utilization of the massive agent/broker network.
We launched Enthusiast+ on our Duck Creek platform in Colorado. This new insurance product was modeled after our Flex product to capture more of the inbound quote flow from enthusiasts looking to insure their late-model collectibles.
We continued to build out our European marketplace team, delivering three successful auctions in Switzerland, Belgium and Italy - key steps that have established Broad Arrow Auctions as the solid No. 2 player on the global stage with more than $624 million in total transaction value across auctions, private sales and financing activity in 2025. This represents 119% growth over 2024. Our Private Sales business has built an outstanding reputation as the trusted brand to help connect top collectors with highly significant cars.
And we successfully renegotiated our Markel arrangement to capture 100% of the premium through the new fronting arrangement. This will lead to increased control and stronger profitability beginning in 2026. (More on this below.) Each of these achievements reflects the same underlying theme: thoughtful investment, member-focused innovation, and disciplined execution. And when taken together, they create the flywheel that efficiently fuels our long-term growth engine.

Looking ahead to 2026 So what comes next? In a word: compounding. In 2026, the plan is for more compounding profit growth and more compounding reinvestment back into our member-centric model.

We expect 2026 will be another year of mid-teens written premium growth and underlying margin expansion. That is the hallmark of a business that is scaling well - doing more and doing it efficiently and effectively. Several forces will support that outlook.

Our ongoing technology investments position us to improve the member experience and streamline our cost structure. The State Farm rollout will continue across the majority of the remaining states with the balance following in 2027. When it’s all said and done, we’ll convert roughly half a million policies to the new State Farm Classic+ program, fueled by Hagerty.

You will also see changes in how our financial results appear, reflecting our previously announced arrangement with Markel, whereby we will assume 100% of the underwriting and investment economics on January 1st, 2026, while paying a fronting fee of ~2%. By controlling premiums from our steady, high-quality insurance operations, this change will boost underwriting profits by 25%. Although our new contractual arrangements with Markel will result in different accounting, it will not change the underlying profit growth trajectory as we invest in our members and consumer- friendly products to make sure we are able to protect more of our 36 million target market.

Upshifting for the long haul If you zoom out and look at our 3-year trajectory since 2022, the numbers tell an impressive story of compounding growth, consistent margin expansion and very high rates of profit growth. But these three years are just a minute relative to what we aim to do over the next decade. It is the story of a great company that is ready to become larger, more global and more technologically savvy, yet retain what has made us so special to 1.7 million members today.

One Team Hagerty comprises a passionate group of car lovers who have built a business to better serve the 67 million auto enthusiasts with authenticity. We are grateful to have you with us on this journey. As always, I want to thank One Team Hagerty.

Your hard work and dedication to our mission is what positions us so well as we shift into fourth gear. Until next quarter, keep on driving. McKeel Hagerty CEO and Chairman HAGERTY Q4 2025 |